Zoho said this morning that the new viewing option is faster than the company's Java, ActiveX and Flash options, it's secure and can play nicely with corporate firewalls. Presenters can set up meetings to display in HTML5 by default, but this new option is only for viewers. Participants seeking to present their own desktops will need to switch to the Java or ActiveX options.

We wrote about Zipcast from SlideShare in February. That service works quite well, too. It has a more public, broadcasting, feel to it whereas this new Zoho product feels like Webex - just better. Simpler, no doubt, but I know I rarely need advanced features and would trade them for joy of use.

When standard, non-proprietary, lightweight web-based technologies become available for online communication, that's good for users. It certainly makes me feel like a problem has been solved and I'm ready to see what vendors like this move on to enabling next. Now we'll see if anyone doing any of the many remote demos I view each week moves off of the big platforms and switches to one of these.

Similarly, Zoho CRM customers can search for customer accounts, create new accounts and add notes and details directly from within their email inbox. All of this is made possible by Google's announcement of contextual gadgets API for Gmail from earlier this year. Third party app developers can embed their services directly within Gmail, healping to streamline business operations.

"Instead of hopping from browser tab to browser tab as they move through a workflow, everything needed to get the job done is presented in a single browser tab," said Zoho's Raju Vegesna. "The contextual integrations for Gmail are our first cross-vendor efforts and open the doors to similar integrations with other third-party applications."

It's wise for Zoho to attempt to reach customers on multiple platforms, especially with the popularity of Gmail and Google Apps. It's likely that many small businesses use a combination of Google, Zoho and other suites to satisfy their operations needs. Zoho says this is "just the beginning" for its Google offerings, so expect further integration in the future.

Among the three tools in Docs, the Word web app comes the closest to fulfilling its promises. While it isn't ready for managing highly complex documents, it's more than sufficient for editing standard text documents collaboratively.

The Word web app includes all the basic editing features one would expect from a stripped-down version of Word, but you can't add footnotes, for example, or insert tables from your Excel files. Thankfully, though, Word will not strip any of these features out of the file. Once you download the file or open it up in Word, your footnotes and will reappear.

This ability of Word to keep a document's formatting shows that Microsoft deliberately chose not to support these features in the web app.

Excel Web App

Among all of the apps, the Excel app is the most basic of the three apps included in the suite. It can only read documents in Microsoft's Office 2007 format, for example, while all the other tools also support older formats. That, by itself, could be a show-stopper for some users, but the most egregious omission here is that there is no graphical interface for entering a formula. Instead, you have to type every formula by hand, which is a slow and error-prone process.

The good news, though, is that the Excel web app can read all the formulas in imported files. It's clear, though, that the app is only really meant for editing existing documents and not for creating new ones.

PowerPoint Web App

The PowerPoint web app did a nice job at opening every PowerPoint file we threw at it. When it comes to editing, however, the app is also very stripped down. You can use it to create a basic outline of your presentation or change the order of your slieds, for example, but you can't add floating images, backgrounds and resize text and image fields. You can, however, add and edit SmartArt clips.

Bugs

While the whole office suite ran very well in all the browsers we tested (except for Safari on the iPad, which displayed the documents just fine but crashed when we tried to edit), Microsoft still has to fix before Docs can become a run-away hit. While Docs has no issues importing most Microsoft Office documents, editing uploaded documents can be tricky. If you set Microsoft Office on the desktop to track the changes you make to a document, for example, the web apps will refuse to let you edit the document. We also ran unto issues with image uploads, which, at times, didn't finish. Docs also often complained that the images we tried to upload were not compatible with Docs, even though they were just standard JPEGs.

Verdict

Microsoft clearly wants users to see Docs as an addition to the traditional Microsoft Office desktop suite and not as a replacement for Office. After using Docs for a while it quickly becomes obvious that a lot of the limitations Microsoft imposed are not due to the fact that Docs runs in the browser, but simply due to the fact that Microsoft didn't want to include them.

While Microsoft is partnering with Facebook on this project, Docs feels like it is stuck between two worlds: the new reality of how people collaborate and share content online - and Microsoft's intent to preserve its old revenue streams for as long as possible.

To some degree, Docs feels similar to Apple's office suite for the iPad. While Pages, Numbers and Keynote on the iPad are sufficient for most basic tasks and hold a lot of promise, users with more than the most basic needs will come away frustrated.

We got a chance to talk to Takeshi Numoto, the corporate vice president of the Microsoft Office Product Management Group, last week. He gave us more information about the Office Web applications. The web-based applications were designed to work on any browser and should even work on most mobile browsers. While some functions will only be available when Microsoft's Silverlight is available on a machine, Silverlight is not a requirement to run most features of the web applications. Numoto stressed that the apps will run on Firefox, Safari, and, obviously, IE, though Google's Chrome is suspiciously absent from this list (Stephen Elop, the head of the Office division explains why at the end of this interview).

The web applications will be tied in closely with the desktop clients, and the online storage will be managed through SkyDrive. For consumers, the web apps will be hosted on Windows Live and will be available for free, although Numoto remained tight-lipped about possible plans to monetize the apps through advertising. We could only get him to acknowledge that Microsoft was indeed 'experimenting' with various options, which we can only assume includes advertising.

Real-Time Collaboration

Another important aspect, which also ties in with a feature that Microsoft is stressing in the desktop applications of the Office suite, is the ability to collaborate on any document with various users simultaneously - including those using the web applications. While we haven't seen this in action, having a rich-text editor at hand for real-time collaboration on Word and PowerPoint documents is going to be a very exciting feature for a lot of users (however some third-party service providers who currently offer similar services will probably not be happy about this).

Enterprise: Office Web Behind the Firewall

For enterprises, Microsoft will offer two solutions. One will be hosted as part of Microsoft's Online Services. Another version, however, will be available for companies to host on their own servers on top of SharePoint. For enterprises, especially those that have long felt that cloud computing wasn't for them, this self-hosted version of the browser-based Office suite is going to be a very attractive solution, especially considering that all of Microsoft's 90 million Office annuity customers will get access to this version as a regular part of the updates that come with these volume licenses.

As Numoto told us, Microsoft believes that this will allow the company to differentiate itself from other companies that offer office solutions in the cloud. While Takeshi was careful not to mention any competitors by name, it is obvious that this is aimed at Google (and perhaps less so, startups like Zoho and ThinkFree).

Clearly, this release will be a major deal for consumers and enterprises. A free version of the browser-based Office application that easily syncs with the desktop version and allows collaboration between users on both systems is going to be a big deal.

What About the Desktop?

The desktop apps obviously also got a make-over. But compared to the shift to Office 2007, the current release features only minor cosmetic updates from what we have seen so far. The integration of the web apps looks like the most exciting addition, as well as the ribbon interface becoming standard across all the applications. Also, Microsoft is putting a lot of emphasis on real-time collaboration, and different users can now edit documents simultaneously. Alhough Numote emphasized that all edits can be reversed.

Numoto also stressed the Office team focused on improving some of the most often used features. As an example, he told us that cut and paste is obviously one of the most popular features in Office, but that Microsoft found that after pasting something into a document, the key that was used the most often afterward was 'delete.' In order to improve the cut and paste process, Office will now feature a 'cut and paste preview,' similar to the feature that Office 2007 already offers for changing styles and fonts, for example.

Outlook aficionados will also be happy to hear that the email client will now feature an option to 'ignore' unwanted threads.

While the Technical Preview, which was announced today, will only be available for a limited number of users, the beta program will be open to everybody. Microsoft expects to ship the final version of Office 2010 in the first half of 2010.

So far, we haven't had a chance to actually test-drive the desktop or web apps ourselves, but you can expect an in-depth review from us once we get access to the beta.

When adding the gadgets to iGoogle or Gmail, you won't have to enter in your Zoho account information in order to access your Zoho data. That's thanks to the oAuth support built in. In order to add a custom gadget to Gmail, you must first turn on a particular setting in labs which allows for this (Enable "Add any gadget by URL" in Labs).

Note: To learn more about custom Gmail gadgets, go here.

In social networks like Facebook and Orkut, the gadgets function more like applications. Once you click the link on the Gadgets page to add them to your profile, you'll be taken to a page where you'll need to enter in your account information before they will appear in your Applications list.

Finally, for OpenSocial compatible networks and applications, a link to an XML file is provided and for anywhere else you need a gadget, there's a generic embed code that can be used.

For anyone thinking of making the switch from Google Docs or Gmail over to the Zoho Suite, gadgets like these can make the transition easier as you'll be able to keep up with what's new even when you're still in your Google applications. And for those of us who spend entirely too much time in social networks, having these gadgets on hand means we won't miss out on the important information that matters most.

The new Zoho Chat 2.0 is no dumbed-down client. It offers most of the features that you have come to expect from your IM desktop applications. You can send files, record your chat history, customize your theme, and more - just like regular IM apps allow. It does a few cool tricks, too. For example, you can type in a new event in the chat bar at the bottom of Zoho Calendar to create a new appointment on the fly. In Zoho Meeting, you can launch desktop sharing with others from within the IM application. (Windows only for now.)

The chat tool is also able to send you notifications from activities that take place within Zoho itself, including document sharing notifications, unread chat messages and more - definitely a handy feature. Future releases for chat include plans to introduce even more IM networks, most notably Skype.

This release represents a major upgrade of the chat application in Zoho. Current Zoho users can try Chat 2.0 here as of today: chat.zoho.com.

Clearly, this new interface, dubbed the MenuTab by Zoho, was inspired by Microsoft's Ribbon interface, which is slowly becoming the standard interface paradigm for Microsoft applications. Zoho smartly keeps the most often used functions like undo/redo, copy, cut, paste, and save outside of these tabs so that they are always available (something MS Office also does thanks to the Quick Access Toolbar). In our tests, the MenuTab worked just as advertised, and if you are comfortable with the MS Office 2007 interface, you will feel right at home in the new Zoho Writer.

Zoho plans to make the MenuTab the default interface for all of its productivity applications in the near future.

New Features

Zoho also added a few new features to Writer. Among these are improved auto-insert fields for dates and page numbers in the header and footer, a word and character count in the status bar, a LaTeX editor, and the ability to change your page layout to landscape mode. Collaborative editing is probably the most important new feature (and a necessary one, given that Google Docs has been doing this for a long time), but as Rafe Needleman points out, it's too easy to overwrite another user's edits.

Every row now features and 'edit' button on the left side, and you can sort columns easily by clicking on a box at the top of each row.  As we are working on the web, these changes are also immediately reflected and saved in the standard version of Google Docs.

Good for Text - Bad for Math

For large spreadsheets, the small screen on a mobile phone makes extensive work on your documents rather arduous. The mobile version is also severely limited, as you can't actually edit any cells that hold mathematical formulas, and when you update a number in your spreadsheet, the results of the formula are not automatically updated. Instead, you will have to reload the page to see the new results.

Because of this, the mobile version of Google Docs spreadsheets is currently only really useful if you just want to edit relatively simple lists of texts.

Documents and Presentations?

We expect that Google will also allow users to at least perform some edits on documents and presentations in the near future, but given the current limitations of the supported mobile phones, we don't expect to be able to create a full-blown presentation on our iPhones anytime soon.

Last year we wrote:

"The fundamental issue in India is the risk/reward equation. It is simply too easy for a young developer in India to get paid a lot by an outsourcing firm; then enjoy being headhunted every year for more money. Those of us old enough to see a cycle or two, can see the parallels between Silicon Valley 1999 and Bangalore 2007, when just being able to spell the words of a popular programming language on a resume meant fame and fortune. It is possible that when this comes back to some reality, the motivation to innovate will come to young Indian developers (yes, young; breakthrough technical innovation tends to come from people under 30)."

This has changed, thanks to the global financial crisis. The big outsourcing firms have hiring freezes, and some firms are laying off. "Big" no longer means "safe." Parents in India will need a while to accept this new reality. In America, many parents would advise their kids to go for start-ups when they are young and can afford to take a risk. In India, all the parents have to do is say "Yes" when their bright kid, who is no longer working for a big outsourcing firm, asks to live at home for a year with free food and bandwidth. Last year's article was written before the Satyam scam was exposed, and it rings even truer now that SWITCH has become WIT.

Three kids working together, living at home, with free food and bandwidth, can change the world.

This is a big change. But it is a below-the-radar change. We cannot see the impact yet. Hundreds, maybe thousands, of young developers will do this in India now. Most will not create a great start-up but will just keep their skills fresh and add to their CV. But one or two will do something totally awesome. The class of 2008/2009 maybe the best ever. Let's see.

The innovation we are already seeing in the market today has been despite these and all the other hurdles faced by entrepreneurs everywhere.

Zoho: Finally, the Indian Software Product Success Story

For a decade or more, entrepreneurs in India have dreamed of creating a software product powerhouse, moving away from the labor-for-hire services model to create products that are winners on the global stage.

I know firsthand from working with a few of these pioneers that it is not an easy ambition to fulfill.

India finally has a product success story. We have written about Zoho many times on ReadWriteWeb and included it in our list of top 10 enterprise products of 2008.

The bigger story is the impact this success will have on young developers in India. Role models matter. Kids in America want to become ski racers now that they have seen Bode Miller. It is said that Sachin Tendulkar has inspired a few Indians. In software outsourcing, Infosys was the role model. Today, that role model may be Zoho.

That Big Wide-Open SaaS Opportunity

Indian start-ups that dreamed of creating the next SAP or Oracle faced massive hurdles on the sales and marketing front. Sure, they could invest five times more in R&D with the same budget. But the reality was that R&D was a tiny portion of the budget. The big money went into sales and marketing. The R&D budget arbitrage was not enough to move the needle.

This is totally and utterly different today. We have written about the SaaS opportunity many times. This opportunity is totally location-agnostic. But it is also totally price- and cost- sensitive, and R&D is the biggest cost. Success stories such as 37 signals, Automattic, and Zoho did not win by hiring an enterprise sales force or buying advertising. They "let the software do the talking."

This is not just an opportunity for a few big winners. This is an opportunity for thousands of small companies to go after niche markets. The interesting thing about niche markets today is that they are inherently global and can be a lot bigger than people think. These small niche start-ups won't make headlines and probably won't get VC financing. But they won't need VC financing. What is fascinating about SaaS globally is how few start-ups have been VC financed. Most have gotten to profitability on tiny seed rounds or even with revenue financing from clients.

DimDim and the Cheap Decade

DimDim is another Indian company that made it onto ReadWriteWeb's list of best enterprise products of 2008. It is a classic SaaS story with an Indian twist. DimDim's proposition is as simple as the whole proposition of offshoring: it just costs less. In this case, it costs less than Webex. That's a popular story in a recession.

It is the same pitch that Zoho is making. Take a basic software service we all need -- say, CRM -- and offer something that is comparable to the market leader at a fraction of the price.

That doesn't sound so innovative; more like a classic "fast-follower" strategy, a better, faster, cheaper strategy. That is easy to want, but hard to execute. When you look at a story like Zoho's, you see a simple strategy but lots of small bits of innovation in the execution that make strategy real. Not glamorous, but effective.

Back in 2003, Forbes wrote an excellent piece called "The Cheap Decade." And as we argued here, the boom we went through from 2004 to 2007 was really just flim-flam, fuelled by incredibly cheap credit and blowing up in our faces. So the cheap decade may be starting for real right now.

Zoho and DimDim are perfectly positioned for the cheap decade. There will be others.

On page 2: the future; and what segments are currently hot in India?

HottestStartUps.In Shows the Future of the Start-Up Launchpad

When I was researching this article, many of my contacts pointed me to a website that runs a competition to find the best start-ups in India. Browsing through it was a fascinating glimpse into an economy of over 1 billion souls in the midst of an incredible transformation.

However, more than any individual start-up, what jumped out at me was that this was a far better launchpad for start-ups than anything we have in the USA. This competition satisfies the three golden rules, FTV:

1. Free for the start-up, so that even one with no funding can play.
2. Transparent; the judging rules are open and the process is independently audited; no suspicion of back-door influence.
3. Virtual; no need to be in a specific place at a specific time in order to fully participate.

Of course this has been made possible by sponsors who have actually donated money to further the cause of innovation; it has not been driven mainly by the for-profit objectives of the event organizer.

What Segments Are Hot with VCs?

VCs miss many great market segments, and entrepreneurs who chase segments that are hot at the moment are usually a day late and a dollar short. Nevertheless, it is interesting to see what is getting funded these days in India. Here are the spaces that have already seen a lot of activity:

• Micro-financing. To some, this elicits a big yawn and a "Yet another micro-financing site?" response. But the blow-up of big banks in last few months indicates that a fundamentally new model may be needed. And India, with its huge unbanked population and technically savvy elite, is where innovation is likely to come from.
• Mobile ad networks. I am a skeptic of these. Nobody has found a way to capture attention on a tiny screen without being totally annoying. Maybe somebody will. They probably will, and it will have to have something to do with location. But it is likely to come from Asia, where mobile is more widespread than in the USA. Mkhoj is a Kleiner-funded entrant from India in this space.
• Personal outsourcing. We wrote about this in our article last year as well, and some of the companies, such as iYogi (disclosure: I have an interest in iYogi) and TutorVista, are doing quite well.
• Better, faster, cheaper SaaS clones. Zoho (which is bootstrapped) and DimDim (funded by VC) will inspire investment in many other segments.

Here are some bleeding-edge segments in which investors are taking an interest and in which India may be well positioned:

• Voice recognition. Voice recognition is hard. It is even harder in multiple languages. The official census in India from 1961 recognized 1,652 languages! Voice recognition is still the killer app for the mobile phone, and it is growing at a crazy pace (with over 3 billion mobile users currently). Ubona looks interesting, with some serious IP but also a pragmatic local market-entry strategy. Mscriber looks like it has a good market strategy, too.
• Mobile payments. In India, people live on their mobile phones, and when you are talking about billions of users, the dollars add up, even if in very small increments. Obopay is one company in this space.

Best Exit: Naukri

Naukri, usually described as the Monster.com of India, may not have the innovation to make techies gasp, but VCs salivate at its return. Naukri rode the outsourcing boom perfectly, exiting via an IPO in November 2006 that was oversubscribed 55 times (ah, remember those days on NASDAQ?).

What Have We Missed?

In a nation of over 1 billion people, where technology is the best route to wealth, we are certain to have missed a ton of amazing innovation. Let us know what it is.

(Photo by Thomas Roche.)

1. Top 10 Semantic Web Products of 2008
2. Top 10 International Products of 2008
3. Top 10 Consumer Web Apps of 2008
4. Top 10 RSS and Syndication Products of 2008
5. Top 10 Mobile Web Products of 2008

Our Criteria

In no order of importance (all three are critical), we looked for three attributes for the top Enterprise web products:

1. Innovation: This is the time for firms that opened up entirely new market categories through disruptive innovation to reap the rewards.
2. Traction: We cannot put a cool new company whose product is just emerging from beta into our top 10. Winners should already have major traction in the market.
3. Longevity: This is a mix of profitability and deep pockets; an ability to outlast the competition.

The market categories that feature in this post are: platforms (with 2 companies making the list), wiki (2), web office (2), CMS 2.0 (1), project collaboration (1), web conferencing (1), and contact networking (1). Note that we didn't consider micro-blogging, RSS or mash-up products, as we consider those to be features rather than products - in the Enterprise market at least.

Drum Roll... and the List

Note: to avoid ranking them (which is impossible because they compete in different markets), the winners aren't in any particular order.

Amazon Web Services (AWS)

Who would have thought that a bookseller could have generated such enthusiasm and loyalty in the developer community? Eons ago, Microsoft won big by winning the hearts and minds of developers. Amazon does that today better than any other company.

Platforms will do well in 2009, though not many will. The platforms market is a race for scale, requiring massively deep pockets. We chose two, but they have lots of very strong competitors breathing down their necks.

Basecamp

37Signals, maker of Basecamp, is a lot of peoples favorite start-up (even its competitors feel obliged to say nice things about the company). The way they do project collaboration is almost as important as what they do. Their "less is more" elegance has become the mantra of developers everywhere. The one issue? It keeps its products separate. You have to choose which one to use. Vendors with suites could take advantage of this.

Confluence (Atlassian)

We are seeing major wiki adoption in the enterprise. It is simply a much easier way to collaborate than by putting lots of complex technology under the general umbrella of the Intranet.

It is hard to pick winners here. The space is crowded. In fact, we picked two for this category (MindTouch is the other). Atlassian seems a safe bet for enterprise, having traction and a good breadth of products. It is also nice that a vendor from the southern-hemisphere (Australia) made the top 10.

DimDim

This is our small-vendor recession play. In a recession, companies travel less, so they use web conferencing more. They also cut whatever budgets they can, and web conferencing isn't spared. DimDim's proposition is incredibly simple: web conferencing for less cost. The one issue? It is still a bit raw, and the company will need deep pockets to satisfy what we expect will be a growing demand.

Google Apps

Google Apps is one of Google's more mature offerings outside of search. It's a huge market, and Google has major traction. The move from PC-based office software to web-based "office tools" accelerated in 2008 and became increasingly mainstream.

The one issue? Google may be spreading itself too thin. Unbelievably, its flagship Gmail is still in beta and suffers from reliability issues, and some modules (such as for spreadsheet) still seem a bit raw compared to those of competitors.

Wordpress

This choice may be controversial. We see a big market in the replacement of first-generation content management systems (CMS), with simpler SaaS tools that have blogging at their core. Automattic's Wordpress is growing in reputation as the platform that delivers this the best.

Deciding between Movable Type and WordPress was a really tough call. Movable Type (which we use for ReadWriteWeb) has major traction in Enterprise accounts. In the end, we chose WordPress based on the quality of its continuous innovation. Salesforce, though, has recently entered this market from a totally different angle. We see CMS 2.0 integrating what are currently stand-alone features: social networking, video, and so on.

LinkedIn

This is a controversial pick. We see this as the "contact networking" space, which will be part of next generation CRM. We deliberately avoided the "social networking" label. Enterprises don't care about being social: they care about managing contacts to make money. Most people would not categorize LinkedIn as "enterprise." It would have been easier to include one of the many vendors that sell white-label enterprise social-networking software. We didn't do that for the same reason we didn't consider micro-blogging as a category: its more a feature than a category, much less a product or company.

But contact networking leader LinkedIn has tackled two of the biggest issues for enterprise: acquiring customers and hiring employees. And it has a huge networks-effect advantage over any of its competitors. It could easily create an "internal enterprise LinkedIn." This is LinkedIn's game to win or lose: it holds the cards in the contact graph deck.

MindTouch Deki

This is the other winner in the crowded wiki ++ space. You can tell a market is in the tornado-high growth stage of the market adoption cycle when it has really tough head-to-head competition. In this particular market, MindTouch and SocialText are banging heads. It looks like a close fight, too close to call really, but we had to make a call and went with MindTouch. It also competes with Atlassian, but not head to head.

We added "++" to "wiki" because the leading vendors are rapidly incorporating micro-blogging, social networking, forums, and other collaboration tools. Integration is key, so we see this market moving towards suites, but with wiki at the core.

Force.com (Salesforce)

This company defined the SaaS/cloud space with brilliant marketing and relentless focus. While it is clearly dominant in the SaaS CRM space, it is also a serious contender in the bigger platform space. If we had to pick one reason why Force.com is a major platform winner, it would be because of its focus on making its partner eco-system succeed. The one big issue? Its core CRM market is being undermined by two serious low-cost competors: SugarCRM and Zoho CRM.

Zoho

Zoho has so many apps, that we can't pick just one! But it is our David-vs-Goliath winner, so deserves to be on this list. At the beginning of the year, the web office market looked crowded. It now has Zoho (David) vs. Google (Goliath), with Microsoft, as always, not to be counted out. In fact, Zoho has yet another Goliath on its hands because it also competes with Salesforce in the CRM space, which points to its one big issue: it is spread very thin, and some of its products show it from their lack of depth.

Limiting It to 10 Is Hard!

This being a time of "back to basics," we had to forgo the luxury of an 11-winner list. We certainly did not allow ourselves a list of 100 companies, which would have kept everybody happy. So we know we have almost certainly missed your favorite company: we expect and hope you'll tell us in the comments.

We were looking for companies that would still be considered success stories one year from now, and hoping to avoid the embarrassment of hailing as a great success a company that crashes and burns in the harsh economy of 2009. That means our top 10 winners should be profitable, or very close to profitability, today. These are companies that would attract a big fat premium if they were to be acquired, even in a lousy market, because they would not be desperate for an exit and could afford to wait out the economy until markets and their valuations become healthier.

We're playing it safe with our top 10 list for one reason: because that is what buyers will be doing.

As explained on Google's FAQ:

"Gears is an open-source browser extension that lets developers create web applications that can run offline. Gears provides three key features:

• A local server, to cache and serve application resources (HTML, JavaScript, images, etc.) without needing to contact a server;
• A database, to store and access data from within the browser;
• A worker thread pool, to make web applications more responsive by performing expensive operations in the background."

That is important. The biggest single hurdle to mass adoption of web-based office software is the inability to use it when online access is not possible (in airplanes and other fun places off the grid). Offline access is also reassuring for those times when the cloud platform is having trouble: at least you can work offline for a while. This is not a small feature. It is the big one.

We get the usual beta warnings from Google:

"Gears is currently a beta product; moreover, it is currently considered to be a developer-only release. When the developer community has had a chance to examine, critique, and improve Gears, a final version suitable for use with production applications will be made available."

But we learn to ignore these beta designations from Google. Gmail still says beta.

But in this case, Google really is being shy about fully bringing Gears to its own product line-up.

Zoho Is Using Gears. Why Not Google Apps?

Zoho started using Gears in Writer as early as August 2007, nearly 18 months ago. In October 2008, Zoho Mail went offline with Gears.

On March 31st, 2008, Google announced Gears for Docs. This was a step forward, albeit 8 months after its competition (Zoho) did it.

So, the big question is, "When will Gmail enable offline use via Gears?" I posed this question to Dave Grirouard, President of Google Enterprise. The response was along the lines of, making it work on the scale of Gmail is not a trivial engineering challenge. That sort of made sense. But Gears has been out for a long time; it is a critical feature, and Google has the best software engineering talent on the planet.

Ahem, What About Chrome?

Is Google holding up Gears until Chrome can support Gears? We hope not. That seems contrary to its philosophy to date, which has been to couple them very loosely. So that is probably just coincidence.

Editor's update: we obviously got the above section totally wrong, so it's been struck out. Apologies for that error, but thanks to our commenters for quickly pointing it out!

"Gears for Mobile Is the Holy Grail"

I had a fascinating talk with Vic Gundotra (VP of Engineering) and Sumit Agarwal (Mobile Product Management). They laid out a mobile strategy that clearly shows that Google is thinking bigger and deeper than anyone else about the future of this huge market. They were also frank about the scale of the engineering challenge. Looking globally, there is no dominant mobile device. In fact, it is an extremely fragmented market. That is a problem when each user expects a native interface.

Vic Gundotra described how about a year ago Google bet that the mobile browser would be the unifying force. Specifically, the strategy was to standardize on Webkit-based browsers. That makes sense but still leaves out the all-important offline access question. So, I posed the "What about Gears?" question. I was told that Gears in a mobile browser was, of course, the "holy grail."

The Answer Given Is Probably Correct

Google is confirming that Gears is critically important to both its web apps and its mobile strategy, and that the delay is simply because deploying Gears on the scale that Google operates is a tough engineering challenge. That seems like the best explanation. But we would love to hear from our readers. Have you used Zoho Mail with Gears, and did it work well? Is it simply a scale issue that is delaying Google's more aggressive deployment of Gears?

However Yahoo Mail did come up with offline functionality in July - it gave offline access to all free and paid Yahoo Mail users through the Yahoo Zimbra Desktop. Earlier this week Yahoo announced further Zimbra integration, this time with its Calendar app.

So Google is well and truly behind the times with offline support for web mail. However the Google white coats are having a fine old time tinkering with mail stuff in their labs - tonight Google Labs announced Advanced IMAP Controls, which lets you "fine-tune your Gmail IMAP experience."

To be fair, Google probably isn't worried about Zoho coming out with offline functionality in its mail product before Gmail has. For one thing Google is so big it can afford to wait until it's good and ready, despite Gmail fans yearning for offline support! But also Google probably sees Zoho less as a competitor at this point (even though Zoho does compete directly against Google Apps) and more as an evangelist for its technology - such as Google Gears.

To access mail offline in Zoho Mail, you'll need Google Gears installed on your browser - at this point IE and Firefox are supported. Chrome and Safari support is coming. According to Zoho's blog, you can also download images and attachments in offline mode. Another cool feature is that Zoho Mail automatically detects your connectivity and switches to online/offline modes.

Here is the video, also available on Google Code blog:

Developers can build their own apps for free or for sale and Zoho allows them to keep 100% of the revenue from app sales. Are these apps for real? It's hard to say. We really like the idea, but Zoho is a complicated company.

As can be imagined, there's a wide range of quality in the apps in the marketplace today. In its announcement Zoho says that more than 100,000 apps have been created with its Zoho Creator database program, but it appears that only about 300 of those are included in the marketplace at launch.

It's hard to know how to find the best apps, to know which ones are effectively duplicates and we expect those issues to continue as developers flock to the platform. It's one thing to rustle through scores of sheep kissing apps on Facebook, or shiny GPS baubles in the iPhone platform - it's another to try and find apps in an office marketplace to run your business on.

Some of the app demos were loading only intermittently during our evaluation and that's not a good sign for something users are going to do business with.

Some, like HelpDesk, look strikingly robust. Others, like the very similar Issue Tracker, look downright insufficient - Issue Tracker's bug tracking app doesn't offer reporting as far as we could tell, for example.

Most of the apps in the marketplace right now are free. The variety of apps available is interesting; one called Camp Registration facilitates registration for events, includes an hour of customization and costs $150. That app can be embedded on any other website. This and all the apps in the marketplace offer a demonstration you can view before installing.

To some degree your trust in Zoho marketplace apps will likely begin as a matter of faith. Readers here presumably are willing to put some amount of trust in online apps in general. There's probably a little more skepticism about Zoho apps in particular. Zoho marketplace apps, developed by people outside the company all together, will be an even further leap of faith. Whether you can make that leap will depend in part on where you started regarding online apps in the first place.

Zoho Apps in General

Google's online office apps were expected to change the world, and by some limited accounts they've begun to. Many people, though, find Google Apps too lightweight and infrequently updated.

Zoho's office suite has faced criticism about being too lightweight but no one can say they are too infrequently updated. A July report from analyst firm the 451 Group reported that Zoho was slowing down on new product roll out and would be focusing on improvement of existing apps. That prediction appears now to be incorrect, but the rest of 451's analysis of Zoho is very useful. "At present, there's still something of a work-in-progress feel about Zoho, with some key functionalities still to come," report authors China Martens and Anne Nielsen wrote.

Ask any major CRM vendor who they're keeping an eye on in their rearview mirror, and Zoho will be among the first players they name. That's pretty impressive for a vendor that has largely relied on word of mouth and user experimentation to gain notice...The company is already well positioned to address the increasing app pricing and integration pressures from customers and has made some initial strides in establishing channel sales.

According to another report from analyst firm Yankee Group though, Zoho already offers a better enterprise collaboration suite than Google. That report tracks 16 collaboration suites head to head, further comparison results still pending.

Zoho tells a good story and is certainly an exciting company to watch, but sometimes the story gets a little more oomph than it deserves. Oliver Marks at ZDNet, for example, wrote this week that a story floating around the blogosphere that General Electric dropped Google Apps in favor of Zoho was not in fact true. Marks reports that GE is still evaluating both services and hasn't made a decision yet about either.

Conclusion: These Apps Will Work for Many People, But Not All

We love platforms, good ones are fascinating in their fecundity even if they are complicated for providers and participants. Zoho does have a lot of momentum in the small business world, so we expect there to be a lot of international developer interest. Will customers come to Zoho and stay? The price and selection are hard to beat so the company will likely win customers for whom those are primary concerns. Would-be customers who prioritize robustness may have a more mixed experience, depending on the apps they select from the marketplace.

In a word - profit. We are looking for companies that have some Web 2.0 characteristics. But we can be loose in that criteria. We are not looking for a "pure" Web 2.0 characteristics. Whatever works, works. But something that is using online technology to disrupt an existing market, maybe using SaaS, user generated content, social media, whatever works in the Web 2.0 bag of tricks.

But we do want to write about companies that have crossed the most important threshold, the one where cash flows from the business and not from investors. So, as we don't believe in overnight sensations, the company was probably founded before 2004. We want to hear from the CEO, who maybe the original founder or somebody who took over when the original business had failed.

We want to hear about massive skepticism, huge mistakes, changes of tactics and even of strategy, near death experiences, all the usual tales of derring-do.

The company can be bootstrapped, or funded by angels, friends and family or VC. No matter where the financing came from, the entrepreneur can now say to them a) no more dilution, and b) thanks for your help, enjoy the ride.

We are launching this series later today with a profile of Jigsaw and their Founder CEO, Jim Fowler. Our earlier profile of Zoho (Part 1 and Part 2) fits the bill too.

We will also give unsolicited advice to these gritty entrepreneurs about the Great Credit Crisis (we're hoping you help us out in the comments on this).

We Want Names

If you know any gritty entrepreneurs, or you are one yourself, we want to hear from you. Send us an email or leave a comment below.

Obligatory cat pic: pasma

UPDATE: Gritty Entrepreneurs: Jigsaw, a Profitable Web 2.0 Venture; the first post in this series

All these experiments are mere rounding errors in Google's financial results. So why does it matter? Confidence matters to Google. More importantly, the fear of Google matters. It is important to them that every initiative has the early adopters jumping on board and declaring the space that Google has just entered to be "game over" for the existing players. Then VCs won't back anybody in that space.

This game worked for Microsoft for decades. But the market is bigger and savvier today and the Internet just looks too darned big for any single firm to dominate.

The Bigger Game - Creating More Content for Search

One explanation for Google's almost anarchic experimentation is that revenue from those products don't matter. They just want more "search fodder" to feed their cash cow. That makes sense. Zoho is committed to being ad free, as is Wikipedia. They have different reasons for being ad free, but that is not what matters.

If Google doesn't dominate web office, they will only be offering advertising on those who cannot afford to pay Zoho their really low price - which sounds like advertising to the sub, sub prime market. If Knol cannot get content up to Wikipedia standards, advertisers will have to associate with sub, sub prime content.

That does not look like the strategy of a winner.

What About Chrome?

Chrome showed Google's brand power in the market. A pretty geeky story (better performance and sandbox security for plug-ins) got tremendous traction in the media and prompted people who had never even made the jump from Explorer to Firefox to look at Chrome.

But it is very hard to see any strategic advantage for Google in splintering the browser market even further. Surely their interest lies in making sure Firefox gains against Explorer? Why not simply continue helping Mozilla?

This looks like an engineering project (yes, a very cool engineering project) that got out to market with a "oh, well, why not, seems a shame to throw it away" rationale.

Has Boredom Become an Issue Inside the Googleplex?

It is almost as if Google is bored. The cash just keeps rolling in. How do they exercise those amazing minds? This is not an uncommon problem. My first job was with a small publishing company in London that had one amazing cash cow and lots of "loss leaders". I naively asked one of the owners why he did this, why not just have the cash cow? He thought for a while and said "well, what would I do every day?"

YouTube, Now That's a Biggie, Right?

Well yes, it is the dominant online video sharing site. However as an advertising business YouTube still has big problems and may still be losing money. At Web 2.0 I asked many people "how would you monetize YouTube?" and a surprising number came up with the solution of getting people to pay to upload. It sounds plausible, small amounts from millions of uploads might add up. But that is totally contrary to Google's mantra of free content funded by advertising and it would allow a "free to upload" competitor to potentially disrupt the market.

Is The Sum Bigger Than the Parts?

Google looks increasingly like a giant private equity firm with lots of unrelated businesses betting on one making it big.

About one year ago, an internal document by Brad Garlinghouse, a Yahoo senior vice president, said that Yahoo was spreading its resources too thinly, like peanut butter on a slice of bread.

Is Google doing the same? Albeit with a cash cow that is massively better than Yahoo's?

What do you think? Is Google spreading itself too thin?